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Gilead shares plunge after Express Scripts spurns its $1,000 hepatitis C pill

Big pharmacy manager picks AbbVie's new hepatitis C drugs over $84,000 Sovaldi treatment

Gilead Sciences Inc., already under fire for the high costs of its hepatitis C drugs, took another hit Monday when the nation's largest manager of pharmacy benefits struck an exclusive deal with a rival drugmaker.

Express Scripts Holding Co. said Monday it will make a newly approved treatment from AbbVie Inc. its sole option for patients with the most common form of hepatitis C.

In response, investors sold off shares of Gilead in trading Monday. The stock of the Foster City, Calif., firm was down $15.55, or 14%, to $92.90.

Federal regulators approved AbbVie's multi-drug Viekira Pak on Friday, and Express Scripts said it had negotiated a discount from AbbVie on the $83,000 wholesale price for the treatment.

"This agreement marks a fundamental change in how sustainable access and affordability will be delivered to hepatitis C patients," said Dr. Steve Miller, chief medical officer at Express Scripts, in a statement.

This move marks the latest development in an ongoing battle over the high cost of new specialty drugs.

Many health insurers and pharmacy-benefit managers have railed against Gilead for charging $1,000 per pill for its blockbuster Sovaldi drug.

A 12-week course of Sovaldi costs about $84,000. Gilead also introduced another hepatitis C drug, Harvoni, with a wholesale cost of roughly $94,000.

Sovaldi had sales of about $8.5 billion through the third quarter of this year.

Critics have warned that specialty drug prices are unsustainable and threaten to drive up health costs for employers, workers and taxpayers funding government programs.

Members of Congress demanded a rationale for the steep price of Sovaldi in the U.S. compared with much lower amounts in other countries.

Gilead has defended the value of its hepatitis C drugs.

The company as well as many medical experts say the new drugs mark a major advance over existing treatments because they offer cure rates as high as 95% with fewer side effects for patients.

Gilead says the new therapies can avoid the long-term medical expenses related to liver failure, cancer and transplants. About 3 million Americans are infected with hepatitis C, but that number may rise as screening for the disease becomes more common.

Gilead spokeswoman Cara Miller said the company "has been negotiating in good faith with Express Scripts and other payers to ensure patients and healthcare providers have access to our medications."

St Louis-based Express Scripts said the AbbVie treatment will be the exclusive option for most hepatitis C patients on its national preferred formulary, which covers about 25 million Americans.

Gilead's drugs will be dropped from that tier. Patients who are already taking the drugs can continue to do so, and Sovaldi will be available to patients with more advanced liver disease, according to Express Scripts.

Twitter: @chadterhune

Copyright © 2016, Los Angeles Times

UPDATE

11:06 a.m. PST: Gilead's stock price was updated

1:43 p.m. PST: Gilead stock price updated, company comment added.

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